Is the house building rate 'rising at its fastest since 2008' or 'falling away'?

22 November 2013

Shadow Chancellor Ed Balls caused a splash yesterday by agreeing with critics of the last Labour government that it "did not move early enough to put house building at the centre of our economic policy when we were in power."

But is the picture any rosier under the Coalition? Depending upon where you get your news from, you could form very different opinions about the latest trends in house building.

According to the goverment's Housing Minister Kris Hopkins, new figures released yesterday:

" we're building at the fastest rate since the crash in 2008, more people are securing a place on the housing ladder, and we're delivering tens of thousands of affordable homes across the whole country."

The Independent however took a rather dimmer view, with its headline on the story proclaiming:

"'Disaster' as UK house-building rate falls away"

Surely both views can't be accurate? Actually, with a bit more explanation they can.

While it isn't clear from the headline, the Independent article seems in fact to be referring to the supply of affordable housing specifically rather than house building in general. It points out that the number of new affordable homes available to buy had fallen by 26% in the past year, with the number of similar properties available in the rented sector down by a third over the same period.

Affordable homes are defined as those earmarked for "eligible households whose needs are not met by the market" and which are often provided through government-backed initiatives.

According to the government's release on affordable housing from yesterday, "a total of 42,830 affordable homes were provided in England in 2012-13, a decrease of 26 per cent compared to the 58,100 (revised) affordable homes supplied in 2011-12."

This isn't contradicted by the Housing Minister, who merely points out that 'tens of thousands' were built.

Instead, Mr Hopkins focuses on the rate of house building in all sectors, where in terms of projects started the year to September 2013 represents a high-water mark for house building not seen since 2008, although the 117,110 homes begun in this period is still 36% lower than the peak reached in the year to March 2006.

Housing completions - properties that are finished and ready to be moved into - have not quite breached this threshold yet, and are actually lower than they were at this point last year.

Whether or not "more people are securing a place on the housing ladder" is more contentious. While the government points to the 50,000 people that have bought a property through either the Help to Buy or Right to Buy schemes, the wider picture suggests that home ownership is falling in the UK.

Census data shows that 64% of the population were owner-occupiers in 2011, a fall from the peak of 69% hit a decade earlier. More recent figures from the English Housing Survey show that both the number and proportion of households owning their homes has fallen every year between 2008/09 and 2011/12.

As we've seen before, housing statistics can often show different parts of the market moving in different directions. Both the Independent and the Housing Minister might have used too broad a brush at points (the former in its headline, from which it isn't clear that the article refers to affordable housing; the latter in his claim about home ownership rising), but the main thrust of each claim can in fact be stood up, depsite them apparently showing very different trends.

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